On October 16, 2017, EPA Administrator Scott Pruitt signed an order reversing a long-standing EPA position that EPA has the authority to review previous state decisions on new source permitting applicability when reviewing Title V permits. The order denied a petition by Sierra Club requesting that EPA object to the issuance of a Title V operating permit to the Hunter Power Plant in Castle Dale, Utah. 

Under the Clean Air Act (CAA), state and local permitting authorities must submit proposed Title V operating permits to EPA for review.  EPA has 45 days to object to issuance of a proposed permit if it determines the permit does not comply with applicable requirements under the Clean Air Act (CAA). If EPA does not object, any person may petition the administrator, within 60 days of the expiration of EPA’s 45 day review period, to object to the permit. In this case the Sierra Club petition raised several claims stating why the Hunter Power Plant Title V Permit should be denied. Sierra’s Club’s first claim was that EPA must object to the Title V Permit because it failed to include Prevention of Significant Deterioration (PSD) requirements. Sierra Club argued that PSD requirements were applicable because they were triggered by modifications to the Hunter Power Plant between 1997 and 1999 that should have been considered “major modifications.” 

EPA stated this claim “raised the fundamental issue of whether decisions made during previous preconstruction permitting . . . should be reconsidered when issuing or renewing a Title V operating permit.” EPA noted it has previously considered similar preconstruction permitting issues when they were raised in a Title V petition. However, based upon “a review of the structure and text of the CAA and the EPA’s regulations in part 70,” EPA concluded “that the Title V permitting process is not the appropriate forum to review . . . preconstruction permitting decisions.” Acknowledging its departure from past EPA guidance on this issue, EPA concluded its position “better aligns with the structure of the Act and the EPA’s original understanding of the relationship between the operating and construction permitting programs under the CAA after the enactment of Title V.” EPA provided the following reasons supporting its decision:

• When enacting the Title V program, EPA “did not express the intention to use the Title V permitting process to review the ‘applicable requirements’ established in preconstruction permitting programs under Title I of the CAA” nor did it indicate the Title V process would give EPA another opportunity to review the merits of a preconstruction permitting decision.

• EPA and courts have noted on many occasions Title V was not intended to add new substantive requirements nor was it “intended to second-guess the results of state preconstruction permit programs.”

• Case-specific preconstruction permitting decisions are better challenged under Title I of the Clean Air Act through a state appeals process or a citizen suit rather than a general Title V permit review. 

• It would be inefficient for EPA to go back and review preconstruction permitting decisions that were already “subject to the safeguards of public notice and judicial review.”

• The Title V review process only provides EPA 45 days to review the proposed Title V permit. EPA would not have enough time to complete an in-depth and searching review of every preconstruction permitting decision in this short time frame.

EPA also outlined its approach moving forward in the order. In Title V permit reviews, EPA will not reevaluate previously issued preconstruction permits. The terms of the preconstruction permit will be incorporated into the Title V permit as “applicable requirements” and EPA will “limit its review to whether the Title V permit has accurately incorporated those terms and conditions and whether the Title V permit includes adequate monitoring, recordkeeping, and reporting requirements to assure compliance with the terms and conditions of the preconstruction permit.” Finally, EPA explicitly stated this interpretation does not limit EPA’s preconstruction permit oversight or enforcement authority under Title I of the Clean Air Act. 

This order has not yet been published in the Federal Register. When it is published, a 60-day window will start for parties to sue the agency and challenge the decision. Some environmental groups have suggested they are seriously considering this option. Environmental groups believe eliminating the ability to review the underlying permit requirements that are contained in a source’s Title V permit will narrow the grounds on which a citizen can challenge a Title V permit. However, EPA appears committed to this policy.  In an October 31, 2017 decision, EPA cited the Hunter Power Plant decision in denying another Title V petition based on a challenge to an alleged flaw in the underlying permit.